Business Law

Explain the facts, issues and reason in the case of Carlill v Carbolic Smoke Ball Company. FACTSThe Carbolic Smoke Ball Company made a product called the "smoke ball". It claimed to be a cure for influenza and a number of other diseases, in the context of the 1889-1890 flu pandemic (estimated to have killed 1 million people). The smoke ball was a rubber ball with a tube attached. It was filled with carbolic acid (or phenol). The tube would be inserted into a user's nose and squeezed at the bottom to release the vapors. The nose would run, ostensibly flushing out viral infections. “100 pounds reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic influenza, colds, or any disease caused by taking cold, after having used the ball three times daily for two weeks according to the printed directions supplied with each ball. 1,000 pounds is deposited with the Alliance Bank, Regent Street, showing our sincerity in the matter”. After seeing this advertisement Mrs Carlill bought one of the balls and used it as directed. She subsequently caught the flu and claimed the reward. The company refused to pay; Mrs Carlill sued. ISSUES

Was there a binding contract between the parties? A contract requires notification of acceptance; did Mrs Carlill notify Carbolic of the acceptance of the offer? Did Mrs Carlill provide consideration in exchange for the 100 pounds reward? Defendant argument is there was no binding contract. The ad was too vague to make a contract as there was no limit for time. There is no means of checking use of the ball by consumers and a person might claim they contracted flu 10 years after using the remedy. Plus, there is no contract because a contract requires communication of intention to accept the offer or performance of some overt act. Meanwhile, Plaintiff’s argument is ad was an offer they were under an obligation to fulfill because it was published so it would be read and acted upon and it was not...

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